Inman

Some real estate theft won’t land you in jail

Quite some time ago, I received a very nasty letter from a lady who moved into a vacant house near Fresno, Calif. She reported she lived there almost three years before being evicted by the mortgage lender foreclosing on the property. “Why don’t you warn readers about the risks of ‘squatter’s rights’ and spending money to fix up vacant property?” she chastised me.

Unfortunately, that woman was uninformed about the state law of adverse possession (formerly called “squatter’s rights”). Every state has some version of this common law doctrine, which encourages use and payment of property taxes on vacant property.

Purchase Bob Bruss reports online.

Most states adopted English common law in the 1800s and early 1900s (except Louisiana, which chose the French Napoleonic Code). Common law includes the law of adverse possession, which allows a “squatter” to claim title after occupying a property and paying the property taxes for a specified number of years.

The details of each state’s adverse possession law are different. But the principle is the same. An adverse possessor or squatter who occupies a property for the required number of years and pays the property taxes can eventually acquire fee-simple title. However, the squatter must pay any secured obligations, such as a mortgage, recorded liens and property taxes, or risk losing the property by the lender’s foreclosure.

Closely related are the state rules for acquiring a prescriptive easement to use part of a property. Again, state laws reveal the details, but payment of property tax is not required to acquire a prescriptive easement.

1. HOW TO STEAL A PROPERTY WITHOUT GOING TO JAIL. Do you know of a property that is vacant and the property taxes are unpaid? It might be a candidate for legal theft by adverse possession.

For example, that lady who occupied the vacant house in Fresno for three years could have become entitled to title by adverse possession if she had paid the mortgage payments and the property taxes.

California has the most generous adverse possession law, requiring “open, notorious, continuous and hostile occupancy” plus payment of the property taxes for only five years.

Texas and several other states have much tougher laws, requiring adverse possession for 30 years before becoming entitled to receive title. Needless to say, not many Texans obtain title by adverse possession. Other state statutes are in between these limits.

The nation’s leading adverse possession court decision is Stevens v. Tobin (251 Cal.Rptr. 587) from the California Supreme Court. Thomas W. Stevens brought his quiet title lawsuit against the legal owner. He argued he adversely possessed for 15 years the San Francisco apartment building at 1899 Oak St. in the famous Haight-Ashbury District. He proved open, notorious, hostile, exclusive and continuous possession. However, he was unable to prove he paid the property taxes. Therefore, the adverse possessor lost and did not gain title to the valuable property.

2. HOW TO STEAL PART OF A PROPERTY WITH A PRESCRIPTIVE EASEMENT. If you want to use just a portion of a property, without obtaining title to the entire parcel by adverse possession for the required number of years in the state where the property is located, your alternative is obtaining a prescriptive easement.

The legal requirements are similar to adverse possession. To acquire permanent use of part of another’s real estate, you must meet the same tests of “open, notorious (that means obvious), continuous and hostile use (without permission)” for the required number of years.

However, use need not be exclusive. Use can be shared with the title holder. Nor is there any requirement for payment of property taxes for the prescriptive easement area.

Examples of prescriptive easements include driveways, paths and a portion of a neighbor’s property used as a garden.

After using the portion of the neighbor’s land for the state-law-required number of years, just as with obtaining title by adverse possession, the prescriptive easement claimant must bring a quiet title lawsuit against the legal owner.

HOW TO PREVENT THEFT OF ALL OR PART OF YOUR PROPERTY. The best way to prevent someone stealing all or part of your real estate is to inspect it periodically to terminate the “continuous” requirement for both adverse possession and prescriptive easements.

Erecting a fence or evicting a trespasser are examples of blocking the hostile user. Be sure to obtain evidence of your action to prevent a claimant from stealing your property.

For example, when I was a summer student at Stanford Law School, on a Sunday morning I wanted to drive into nearby Palo Alto. But campus police blocked the main drive with a barricade. The polite officer directed me to take a detour. He explained that every summer Stanford blocks its private roads for a few hours on a Sunday to prevent anyone from acquiring a permanent prescriptive easement.

PERMISSION DEFEATS HOSTILE USE. If you discover someone is occupying all or part of your property without your permission, but you really don’t care, granting permissive use will usually defeat any later claim for a prescriptive easement or obtaining title by adverse possession.

Of course, be sure to document your permission to the hostile user. Consultation with a local real estate attorney is advised because situations vary.

To illustrate, if pedestrians walk over part of your property, erecting a sign such as “Permission to pass over this property is revocable at any time” may preserve your rights. Or you might be advised to record permissive use, if allowed by state law.

WHEN ADVERSE POSSESSION IS MOST LIKELY TO OCCUR. Thousands of individuals own real estate they rarely use. When they die, their relatives and friends might not be aware of a distant property owned by the deceased owner.

That is an ideal situation for adverse possession to arise. For example, there is a house adjoining my home that has been vacant almost three years. I understand it is owned by a contractor who plans to renovate it someday. If I wanted to obtain title by adverse possession, I could move in, pay the property taxes, and hope he doesn’t show up to evict me. If he should die, maybe his relatives don’t know about his ownership.

Abandoned property is relatively easy for squatters to move in and eventually gain title by adverse possession. Rural properties are most often abandoned, although it can happen in cities.

To prevent loss of property title by adverse possession, or loss of partial use by a prescriptive easement, be sure your relatives, friends and charity beneficiaries know about your real estate holdings.

CONCLUSION: Adverse possession and prescriptive easements are legal methods of stealing real estate. But property owners can prevent such thefts by periodically inspecting their real estate to be sure nobody is occupying all or part of it without permission. Further details are available from a local real estate attorney where the property is located.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

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